Amended  IN  Senate  June 23, 2025
Amended  IN  Assembly  March 17, 2025

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill
No. 789

Introduced by Assembly Member Bonta
(Principal coauthor: Assembly Member Rivas)

February 18, 2025

An act to amend Section 1385.01 of the Health and Safety Code, and to amend Section 10181 of the Insurance Code, relating to health care coverage. 89517.5 of the Government Code, relating to the Political Reform Act of 1974.


LEGISLATIVE COUNSEL'S DIGEST


AB 789, as amended, Bonta. Health care coverage: unreasonable rate increases. Political Reform Act of 1974: security expenses.
The Political Reform Act of 1974 regulates the use of campaign funds held by candidates for elective office, elected officers, and campaign committees. The act authorizes a candidate or elected officer to use campaign funds to pay or reimburse the state for the reasonable costs of installing and monitoring a home or office electronic security system or for another tangible item related to security, and for the reasonable costs of providing personal security to a candidate, elected officer, or the immediate family or staff of a candidate or elected officer, provided that the threat or potential threat to safety arises from the candidate’s or elected officer’s activities, duties, or status as a candidate or elected officer or from staff’s position as staff of the candidate or elected officer. The act permits a candidate or elected officer to expend a maximum of $10,000 of campaign funds for these purposes during their lifetime.
This bill would eliminate that monetary cap until January 1, 2029. Beginning January 1, 2029, the bill would instead permit a candidate or elected officer to expend a maximum of $10,000 of campaign funds for these purposes per calendar year per individual.
The Political Reform Act of 1974, an initiative measure, provides that the Legislature may amend the act to further the act’s purposes upon a 2/3 vote of each house of the Legislature and compliance with specified procedural requirements.
This bill would declare that it furthers the purposes of the act.

Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the regulation of health insurers by the Department of Insurance. For these purposes, existing law defines “unreasonable rate increase” to have the same meaning as in the federal Patient Protection and Affordable Care Act, which is that an unreasonable rate increase exists when the federal Centers for Medicare and Medicaid Services makes a determination that a rate increase is excessive, unjustified, or unfairly discriminatory, among other things.

This bill would instead provide that an “unreasonable rate increase” exists if the Director of the Department of Managed Health Care or the Insurance Commissioner, as applicable, makes a determination that a rate increase is excessive, unjustified, unfairly discriminatory, or otherwise unreasonable.

Vote: MAJORITY2/3   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 89517.5 of the Government Code is amended to read:

89517.5.
 (a) (1) For purposes of this section, “security expenses” include all of the following:
(A) The reasonable costs of installing and monitoring a home or office electronic security for a candidate, elected officer, or the immediate family or staff of a candidate or elected officer.
(B) The reasonable costs of providing personal security to a candidate, elected officer, or the immediate family or staff of a candidate or elected officer.
(C) Any other tangible item related to security for a candidate, elected officer, or the immediate family or staff of a candidate or elected officer.
(2) “Security expenses” do not include either of the following:
(A) Payments to a relative, within the third degree of consanguinity, of a candidate or elected officer.
(B) Payments for a firearm.
(b) (1) Notwithstanding Section 89517, campaign funds may be used to pay, or reimburse the state, for security expenses to protect a candidate, an elected officer, or the immediate family or staff of a candidate or elected officer, provided that the threat or potential threat to safety arises from the candidate’s or elected officer’s activities, duties, or status as a candidate or elected officer or from staff’s position as staff of the candidate or elected officer.

(2)Expenditures of campaign funds pursuant to this section shall be limited to a lifetime maximum of ten thousand dollars ($10,000) for a person who is a candidate or elected officer. This lifetime maximum shall apply regardless of whether the person is a candidate or an elected officer for multiple offices.

(2) (A) A candidate or elected officer may expend campaign funds pursuant to this section without any monetary cap until January 1, 2029.
(B) Beginning January 1, 2029, a candidate or elected officer may expend up to ten thousand dollars ($10,000) of campaign funds pursuant to this section per calendar year per individual. This limit applies regardless of the number of offices the candidate or elected officer seeks or holds.
(c) (1) If a committee uses campaign funds to pay, or reimburse the state, for the costs of installing a home or office electronic security system or for any other tangible item related to security, either the security system or other item shall be returned to the committee or reimbursement for the security system or other item shall be made to the campaign fund account of the committee that paid for the security system or other item, pursuant to the requirements of paragraphs (2) and (3).
(2) (A) Except as provided in subparagraph (B), return or reimbursement is due within one year of when the elected officer leaves the office for which the security system or other tangible item related to security was purchased or when the candidate is no longer a candidate for the office for which the security system or other item was purchased, or, if applicable, upon sale of the property on which the security system is installed, whichever occurs sooner.
(B) If there is a continuing threat to the physical safety of the candidate or elected officer, the threat arises from the candidate’s or elected officer’s activities, duties, or status as a candidate or elected officer, and the threat has been reported to and verified by an appropriate law enforcement agency, return or reimbursement is due within one year of when the threat verified by the law enforcement agency ceases, or, if applicable, upon sale of the property on which the security system is installed, whichever occurs sooner.
(3) The amount of the reimbursement shall be the fair market value of the security system or other tangible item related to security at the time that reimbursement is paid or due pursuant to paragraph (2), whichever occurs sooner. For a security system installed at the home or office of, or for an item purchased for, a candidate or elected officer, the candidate or elected officer shall pay the reimbursement. For a security system installed at the home or office of, or for an item purchased for, immediate family or staff, either the candidate or elected officer, or the immediate family or staff, shall pay the reimbursement.
(d) The immediate family or staff of the candidate or elected officer shall not be personally liable for reimbursement for expenditures for security expenses pursuant to this section.
(e) (1) The candidate or elected officer shall report an expenditure pursuant to subdivision (b) and a reimbursement pursuant to subdivision (c) on the candidate’s or elected officer’s campaign statement filed pursuant to Article 2 (commencing with Section 84200) of Chapter 4.
(2) With each report described in paragraph (1), the candidate or elected officer shall also submit a form to the Commission, in a manner prescribed by the Commission and signed under penalty of perjury, that describes and verifies the threat or potential threat to the candidate or elected officer, or to their immediate family or staff, that arose from the candidate’s or elected officer’s activities, duties, or status as a candidate or elected officer and that necessitated the expenditure or reimbursement.
(3) As part of the recordkeeping requirements in Section 84104, the candidate or elected officer shall maintain detailed accounts, records, bills, and receipts relating to an expenditure or reimbursement described in paragraph (1), including records providing evidence of the threat or potential threat to safety that gave rise to the need for the expenditure.

SEC. 2.

 The Legislature finds and declares that this bill furthers the purposes of the Political Reform Act of 1974 within the meaning of subdivision (a) of Section 81012 of the Government Code.
SECTION 1.Section 1385.01 of the Health and Safety Code is amended to read:
1385.01.

For purposes of this article, the following definitions shall apply:

(a)(1)“Blended” means a rating method that combines community rating and experience rating methods.

(2)“Community rated” means a rating method in the large group market that bases rates on the expected costs to a health care service plan of providing covered benefits to all enrollees, including both low-risk and high-risk enrollees. Premiums may vary according to the factors in this article.

(3)“Experience rated” means a rating method in the large group market under which a health care service plan calculates the premiums for a large group in whole or blended based on the group’s prior experience.

(b)(1)For individual and small group market products, “geographic region” has the same meaning as in Sections 1357.512 and 1399.855.

(2)For large group market products, “geographic region” means one of the following areas composed of the regions defined in Sections 1357.512 and 1399.855:

(A)An area composed of regions 2, 4, 5, 6, 7, and 8, which consist of the Counties of Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma and the City and County of San Francisco.

(B)An area composed of regions 1 and 3, which consist of the Counties of Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne, Yolo, and Yuba.

(C)An area composed of regions 9 and 12, which consist of the Counties of Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz, and Ventura.

(D)An area composed of regions 10, 11, and 14, which consist of the Counties of Fresno, Kern, Kings, Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.

(E)An area composed of regions 13 and 17, which consist of the Counties of Imperial, Inyo, Mono, Riverside, and San Bernardino.

(F)An area composed of regions 15 and 16, which consist of the County of Los Angeles.

(G)An area composed of regions 18 and 19, which consist of the Counties of Orange and San Diego.

(c)“Large group health care service plan contract” means a group health care service plan contract other than a contract issued to a small employer, as defined in Section 1357, 1357.500, or 1357.600.

(d)“Small group health care service plan contract” means a group health care service plan contract issued to a small employer, as defined in Section 1357, 1357.500, or 1357.600.

(e)“PPACA” means Section 2794 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-94), as amended by the federal Patient Protection and Affordable Care Act (Public Law (111-148)), and any subsequent rules, regulations, or guidance issued under that section.

(f)An “unreasonable rate increase” exists if the director determines that a rate increase is any of the following:

(1)An excessive rate increase.

(2)An unjustified rate increase.

(3)An unfairly discriminatory rate increase.

(4)Otherwise unreasonable.

SEC. 2.Section 10181 of the Insurance Code is amended to read:
10181.

For purposes of this article, the following definitions shall apply:

(a)(1)“Blended” means a rating method that combines community rating and experience rating methods.

(2)“Community rated” means a rating method in the large group market that bases rates on the expected costs to a health insurer of providing covered benefits to all insureds, including both low-risk and high-risk insureds. Premiums may vary according to the factors in this article.

(3)“Experience rated” means a rating method in the large group market under which a health insurer calculates the premiums for a large group in whole or blended based on the group’s prior experience.

(b)(1)For individual and small group market products, “geographic region” has the same meaning as in Sections 10753.14 and 10965.9.

(2)For large group market products, “geographic region” means one of the following areas, composed of the regions defined in Sections 10753.14 and 10965.9:

(A)An area composed of regions 2, 4, 5, 6, 7, and 8, which consist of the Counties of Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma and the City and County of San Francisco.

(B)An area composed of regions 1 and 3, which consist of the Counties of Alpine, Amador, Butte, Calaveras, Colusa, Del Norte, El Dorado, Glenn, Humboldt, Lake, Lassen, Mendocino, Modoc, Nevada, Placer, Plumas, Sacramento, Shasta, Sierra, Siskiyou, Sutter, Tehama, Trinity, Tuolumne, Yolo, and Yuba.

(C)An area composed of regions 9 and 12, which consist of the Counties of Monterey, San Benito, San Luis Obispo, Santa Barbara, Santa Cruz, and Ventura.

(D)An area composed of regions 10, 11, and 14, which consist of the Counties of Fresno, Kern, Kings, Madera, Mariposa, Merced, San Joaquin, Stanislaus, and Tulare.

(E)An area composed of regions 13 and 17, which consist of the Counties of Imperial, Inyo, Mono, Riverside, and San Bernardino.

(F)An area composed of regions 15 and 16, which consist of the County of Los Angeles.

(G)An area composed of regions 18 and 19, which consist of the Counties of Orange and San Diego.

(c)“Large group health insurance policy” means a group health insurance policy other than a policy issued to a small employer, as defined in Section 10700, 10753, or 10755.

(d)“Small group health insurance policy” means a group health insurance policy issued to a small employer, as defined in Section 10700, 10753, or 10755.

(e)“PPACA” means Section 2794 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-94), as amended by the federal Patient Protection and Affordable Care Act (Public Law 111-148), and any subsequent rules, regulations, or guidance issued pursuant to that law.

(f)An “unreasonable rate increase” exists if the commissioner determines that a rate increase is any of the following:

(1)An excessive rate increase.

(2)An unjustified rate increase.

(3)An unfairly discriminatory rate increase.

(4)Otherwise unreasonable.